After the Bust

Ok, now I understand why this healh care plan is going to be so expensive.  12 million foriegn aliens are going to get free coverage, yes, that makes sense.  If we buy some additional printing presses the U.S. Mint can run the ones that we already have and the new ones faster, and we can print enough money to cover everyone with health insurance in both North and South America.  Why not?  It’s a great idea.  Talk about good international relations!

I guess not guarding the borders well will now be a whole lot more expensive than it used to be.  For every undocumented alien who gets into the U.S., the health care cost will just keep on going up.  I have to say that if I were thinking about moving back to the U.S. given the proposed coverage I would do it for that alone.

It used to be that being a citizen of the U.S. meant something, but I guess that now it does not.  I can hardly wait to hear what happens when they turn away veterans and people who are paying massive taxes because the services are being soaked up by those who are here illegally.  That should turn out to be an interesting sight.

I don’t know about you, but I think this is a terrible proposal that has been added to the plan.  Health care coverage was never supposed to be about taking care of everyone, it was about taking care of U.S. citizens who could not afford coverage.  If we do not know who is a citizen, that is a failure that must be fixed before we move forward.

Popularity: 8% [?]

The unemployment rate in Nevada hit 12.3% the other day and I have read that it is at or near 15% in Michigan.  Nationally we have hit a 50 year unemployment high that is climbing, and there are nearly a million and a half people not counted as unemployed because they haven’t searched recently for work.

When you consider the fact that the unemployed are staying that way for a longer and longer period, you can begin to understand why polls are saying that there is an “erosion of confidence” in our economic system. 

The problem is that there are no real signs that things are turning around.  The Press wants to jump on anything.  If a dog barks, or home prices stabilize in Beverly Hills, it must be an economic recovery.  In reality things are likely to get worse in 2009 with continued housing market problems and a new wave of commercial defaults and foreclosures coming our way.

No one really knows if 2010 will end this down market or if it will take much longer.  Real estate cycles can last decades.  In Las Vegas we have been told that there is a 5 year supply of commercial buildings, condos and homes that will have to be absorbed in order for us to return to normal.  Unless we see a mass exodus from California, which is not entirely unrealistic, it will take much longer than most people are willing to admit.

I’m not trying to be negative here, just report some dire information about our economy and the direction in which it is headed.  I am looking forward to the time when things get better, but it appears that we have to prepare for more pain not less.

Popularity: 4% [?]

Have you ever started to wonder what is going to happen to our health care system if one of these proposed plans ever reaches the light of day?  Pundits say it is “impossible” for the proposed plans to cause the termination of Medicare because it is “so popular.”  There is, however, no way to float a national health care system without destroying anything that is good about the one we have. 

It will be some trick if a  government sponsored national health care plan manages to survive without creating massive supply and demand distortions.  I’m still trying to figure out how my doctor, who I struggle to see when I need him, is going to take on twice as many patients as he now has and still provide me with a valuable service.  Most of the time I currently see his Physician’s Assistant or his Nurse, so if he doubles his load I will only bee seeing a medical tech of some kind.  I might as well just buy a good medical book.

I am also interested in knowing why my employer would be willing to continue to pay for my somewhat expensive health care coverage when he knows that I could at any time go on a much cheaper federal plan. 

As I have noted on this blog in the past, I’m not totally against changing the system that now exists.  I think the system is not being run in our best interest, how can it be when it is a puppet that belongs to big insurance companies?  Health care is one of those sacred areas where capitalism just shouldn’t be.  Do we need to make a buck on everything?  Years ago society left health care to health care providers.  Now it is run like a consulting business and you will find that, unless you are wealthy, you simply can’t afford those top shelf services that you may absolutely need.

A restructuring of the health care system is relatively easy.  Fix prices for services, and have the prices associated with hard costs . . not associated with lost profits as they are today.  Get the insurance companies out of the health care industry once and for all, but don’t substitute the government, that’s crazy.

Popularity: 6% [?]

I still do some business, but I’m not as active as I once was before the “bust.”  What I have seen in my limited sampling of the business world is a dramatic increase in slow pay no pay situations.  It seems like the guys who used to pay in 10 days are now paying their bills out at 45 days and the guys who did net 30 payments are paying in 90 days.  That affects me a bit, but I don’t have a huge number of invoices outstanding at any given time. 

The slow pay trend must be having a nasty impact on larger businesses with many outstanding  invoices.  If many companies are delaying their payments I could see how a slow pay trend could cause a great deal of pain.  This is kind of back to the “house of cards” argument that I talked about in some other posts on this site.  If enough companies start doing delayed payments, its could very well crash others by destroying their cash flow.

I guess that slow pay is better than “I.O.U. pay” that is planned, and may have started, in California.  Myu problem with their plan is that I can’t eat an I.O.U. and I can’t pay my grocery bill or power bill with an I.O.U. either.  I’m interested in seeing how the open market discounts California I.O.U.’s if they hit the street.  California gives you a paycheck for $ 3,000 and you sell the paper for what, fifty cents on the dollar?  Whatever the discount turns out to be, the people who receive them will still have to peddle the paper to buy groceries.

For all of the money that has been dumped into the economy of late by the government I’m not yet seeing a lot of it in circulation.  As discussed on this site, there is a lot of bank hoarding and investor hoarding of dollars.  I still think that it is just a matter of time and all of that money will start to chase hard assets.  We shall see.

Popularity: 10% [?]

The lines are being drawn for the Senate battle on Mr. Obama’s health plan.  I know that the government systems that I have seen overseas provided inferior quality, inferior to what most of us have come to expect from our system.  On the other hand, I have seen my health insurance increase to the point where it makes my mortgage payment look reasonable.

So part of the question is, do you want to continue down the path that you are on, with private health insurance companies taking huge profits and increasing premiums to the point of absurdity, or should things change?

The war of words going on in the press today has pitted the greedy insurance companies against inept politicians.  The insurance company representatives, usually highly paid Doctors, keep telling us that the government will turn out to be worse than they are.  I think that is rich, don’t fall for government control of the health care system because they will screw you worse than we have . . great defense guys. 

While there are some individuals who are lucky enough to have lifetime coverage, most of us will hit a point where we can no longer afford it.  I have read that you need $ 200,000 to $ 300,000 in savings just to pay health insurance premiums if you want to retire.  That means if you are not one of the lucky few who have paid lifetime coverage or who can pay the discussed premiums from savings you will also suffer the same fate, health insurance cancellation.

Personally I don’t think the argument that doctors will leave the industry in droves because they won’t be able to get rich is a farce.  If you provided even a portion of the excess that is going to insurance company profits you could increase what doctors received, and then maybe they could make more decisions based on what is best for patients and not on what is best for the Big Bucks Insurance Company profits.

I hate to see more government intrusion into the health care market, but if you talk to people who think the government is there as a last resort to help them, for example veterans or helpless elderly individuals, you will find that they are shunned if they can’t pay monster premiums.  Many people are fooled into thinking that existing programs help people when the help is minimal or non-existent.

The question, do you need health insurance, can more easily be answered with a resounding no than an impossible to achieve coverage yes.  If you can see in the relatively short term future that health insurance premiums, that now cost a typical family at or above $ 8,000 per year, may become unaffordable.  Then there really isn’t much decision making with regard to the changes being presented.

Popularity: 9% [?]

Just when we needed the government to recognize that their involvement in the private sector caused the current banking crisis and the subsequent recession, due to political pressure that caused funding to flow through Freddie Mac and Fannie Mae like it was water, we now have them meddling in the valuation business.

Nevada’s establishment of new Broker Price Opinion (BPO) rules that take effect on July 1, 2009 will allow about 20,000 real estate agents to express “price opinions” upon which decisions will be based by buyers, sellers, lienholders and third parties “making decisions or performing due diligence related to the potential listing, offering, sale, exchange, option, lease or acquisition price of a parcel of real property.”  In other words, for almost any purpose besides an application for a new loan.

One might ask, “are there any special qualifications required of an agent beyond the 1 or 2 weeks of real estate training required of agents for licensing to express such opinions?”  The answer would be no.  One might also ask, “is there any penalty for unqualified agents expressing opinions that are in error, and that may cost buyers, sellers, lienholders and others thousands or millions of dollars in losses?”  Again the answer would be no.

So what the Nevada State government has done with this law is allow the entry of thousands of untrained individuals into the valuation business at a time when valuing real property has become more difficult than it has been in the last 10 years.  Who exactly has this law been written to protect?

I have been a real estate broker for over 30 years and in 1991, after our country’s first financial fiasco with Savings & Loans, appraiser licensing was adopted based on a federal mandate.  The appraisal business has come a long way since then, and appraisers are so much better qualified than agents with regard to the valuation process that the professions have parted ways.  By allowing any real estate agent to act as a value expert is a giant leap backward.  

One wonders if this new law and its timing has anything to do with the fact that appraiser’s have not been willing to provide market value opinions high enough to support higher listings and the upward pressure on prices (see “Realtors Say Low Appraisals Sinking Deals“).

For those party’s buying “broker price opinion” products from real estate agents in Nevada, I guess the government has set up a situation for you where its “let the buyer beware.”  An army of unqualified real estate agents will be giving you a chance to purchase their opinion, but if it’s inaccurate you only have yourself to blame.

Popularity: 17% [?]

As many of you are already aware David Letterman and his CBS handlers took their shot at pumping up Letterman and his show’s ratings by performing a rape “joke” about Sara Palin’s daughter the other day. It was one in a series of vile and condescending Palin comments that Mr. Letterman has made of late. After being called on the “joke” he subsequently made an excuse that he did not know that Sara Palin was accompanied by her 14-year old daughter and not her 18-year old daughter. The excuse was insincere, if Mr. Letterman and CBS did not know who was with Mrs. Palin they should have known before doing the “joke.” Personally I don’t think the “joke” was appropriate even if it had been directed at the older Palin daughter.

Thirty years of being a comedian means that you have been privileged, it doesn’t give you license to destroy personal lives to increase your popularity. I’m sure that everyone important at Mr. Letterman’s CBS Show sat down in a big office and decided that the Letterman Show and Mr. Letterman himself would survive the firestorm that would follow the “joke.” Negative publicity is better than no publicity, isn’t that the saying? . . . the end justifies the means? I’m sure that it was all about ratings and garnering the biggest share of the audience in a competitive late night time slot.

Personally I think it was one of those low blows that will follow Mr. Letterman to the end of his days. When you become so desperate for continued fame that you will do anything for it, you won’t be remembered for being a great entertainer, great entertainers don’t have to viciously attack others to remain popular.

I hope that Mr. Letterman has ignited a fire under a big enough group of public protestors that he feels the heat from his sponsors. Since money is apparently the only thing that he cares about, maybe the loss of a sponsor or two will ring his bell.

Popularity: 10% [?]

Here is my rant for the day, just a few things that I had to say about general misconceptions or bad assumptions, take something from them or leave them, I don’t care.

1. The Doctor’s First Priority is to Save You;  You can find out the hard way, like I have, that the doc is interested in doing things the “acceptable” way and all others are not considered.  The perfect example of this is the treatment of c-diff, a nasty intestinal super bug that takes over when you have killed everything else in your gut by taking strong antibiotics.  The doc says there is no way to replace your bugs and he would rather you die than be treated with an “experimental” method.  The fact of the matter is that doctors wear blinders, and you had better take the responsibility of finding out about alternate treatments, because they won’t be suggested to you.

2. Lawyers Represent You;  Sure in some wacked-out sense I guess they do.  Fact of the matter is that they are “officers of the court” and they understand that they live and die in the legal system.  I have been sold out by a number of attorneys over the years, they simply will not act as they are directed to by their clients.  Lawyers actually believe that whatever they decide to do on your behalf was in your best interest.  The greed and corruption that goes on within the legal system is so far from the ideals that people believe in that you have to be a fool to think that they are one in the same.

3. Things Will Always get Better; well maybe they will, and maybe they won’t, of course the real question that most people want answered is “will things get better for me in my lifetime?”  If you look back through time you see some good times and lots of bad, so it just depends if you are lucky enough to have lived during a period of good times.  Good times are also relative to the individual who is living them, I’m sure that there were some people who prospered during the great depression.

4. The Government Will Take Care of You; I think that this misconception is being tested of late, since many people are realizing that the government may be able to print a lot of money, but it can’t really solve many problems with it.  A billion here a trillion there and what do you get?  Usually just a whole lot of nothing.  If you want to find out about what the government will do for you, start calling Veterans or people over 65 who are dealing with the health care system to survive.  Sorry to burst your bubble, but they simply will not be there when you need them.

5. You Will Receive Equal Treatment; Yes, when you reach the planet Krypton and they are preparing your body as food you will receive equal treatment.  Besides that possibility, your treatment as an equal here on earth is unlikely.  Sure you may be able to force someone to consider you as a player, you are drawing breath and you did pay the entry fee, but don’t think for a moment that you are receiving equal treatment, its a myth.

6. Luck Counts; Sure it does, but almost insignificantly.  If your only way out of your problem, whatever it may be, is to hope that you will get lucky, that things will change for you, you are well along the path toward failure.

7. Life is Fair; No, it is not.  People with quality food, shelter, drugs, health care and support systems live longer and likely enjoy their lives more than those without these things.  There will always be a battle between those who have and the have nots.  As we have seen in the past, even governments that claim that their sole purpose is the equal distribution of weath have failed. 

Don’t think for a minute that I don’t appreciate my own situation, that’s just another bad assumption on your part.  I just don’t think that some people have had time to pull back the curtains and see that there are “Wizards” behind them and that they are as biased and falible as any other humans who makes decisions.

Popularity: 14% [?]

Can you see what is on the horizon, looks like $11 a pack cigarettes, higher unemployment, higher gas prices,  the implemenation of a large value added tax (VAT)  increases and all while we are struggling to get through one of the most difficult time in years.  Many have already succumbed to living with increased stress.

I don’t have to tell you how bad stress is for you physical and mental health.  There are hundreds of articles and books already written about strees and the negative effects that it can have on your life.  Stress can make your life much more difficult, and ultimately it can bring you down.

Watching television and listing to radio doesn’t help, most of the popular shows take one side or the other, telling us how much better change will be or saying that we are headed into deep water with the changes proposed.

While I don’t think “don’t worry, be happy” is an entirely appropriate direction, I do think that simplifying ones life is a good idea.  Getting rid of excess baggage in our lives like expensive, gas eating toys is not a bad idea.  Do you really need that second boat or camping trailer?  How long has it been since you got on those ATV’s or motorcycles?

How about making a serious run at your boss regarding working from home?  Even a day or two a week would cut commute time, gas expenses, clothing costs and generally make you life less stressful.  If not, how about trying to get the work week shortened to four 9 hour days?  It takes an effort, but if you can find ways to increase the quality of your life by managing your time better, you will likely decrease your stress.

Popularity: 20% [?]

It’s so much easier to not prepare for any potential future crisis that it’s almost the American way.  Like the government’s preparation for Hurricane Katrina, its was easier to turn a blind eye.  I remember picking up a magazine and reading an article about the potential for a huge negative impact to New Orleans if a Hurricane hit there many months before Katrina arrived.  The potential for loss was great and it was well known, yet there were very few who thought to prepare. 

Regardless of the recent announcements that state that the government thinks things are getting better, we are now looking at the potential for a another wave of home mortgage foreclosures, the likelihood of numerous commercial mortgage foreclosures and by the way the monetary system as we now know it may not survive.  A major inflation has been predicted by many prominent economists.   Without being a full on survivalist, there are many people getting back to the basics of having stored food, water, a gun and gold just in case.

If I mention being prepared to many people I get the “I don’t want to survive a crisis that I need food, water or a gun for.”  While everyone has their own decisions to make, and I’m not trying to sell you anything, I can’t see that it would take a great deal of effort to prepare for an unlikely event.  Maybe we won’t have any futher financial crises, but then again you could find yourself in an earthquake, flood, storm, epidemic or part of some other natural disaster.  Being prepared is not just a good idea for Boy Scouts.

Oh yeah, I want to give some credit to Ameko on the “Your Money” MSN message board for reminding me to get plenty of shotgun shells just in case the zombies come.

Popularity: 21% [?]